In an interview with Money Marketing, Lord Lamont, who calls himself “a slump professional”, champions the role of financial advice.
He says: “Financial advisers are important to the integrity of the whole system. I think, in this situation, people are very confused. They cannot remortgage, a lot of people’s incomes will have contracted and they need advice on what they can do.”
Lamont says next week’s Budget must introduce incentives to save so the UK economy can become more self-sufficient.
He says: “We are in a paradoxical situation where we want people to spend, in theory, but, looking at the fundamentals we need people to save. For the longer term, we have to finance more of our activities from within this country. We have to have more domestic saving and the same applies to the US.”
Lamont says the Budget should improve incentives to save in Isas, but on pension savings he says the Government needs to go “back to the drawing board”.
He says: “Pensions are a real mess. We have to encourage people to save for their retirement, and something has to be done about company pensions, which are being murdered at the moment.
“In the Budget, the Chancellor has got to set a series of signposts as to how borrowing will be reduced, rather like I did in 1993. I signalled ahead that taxes would go up in 1994 and 1995 and was really binding the hands of my successors. He has to create a roadmap because there is a danger that confidence could snap because of levels of borrowing.”